Kimmeridge Texas Gas Receives Approval for Commonwealth LNG Export Terminal Project

Kimmeridge Texas Gas (KTG), an affiliate of the energy-focused alternative investment manager Kimmeridge, has secured a green light for its proposed 9.5 million tons per annum (mtpa) liquefied natural gas (LNG) export terminal project on the west bank of the Calcasieu Ship Channel at the mouth of the Gulf of Mexico/America near Cameron Parish, Louisiana.

The Commonwealth LNG project, which originally received authorization from the Federal Energy Regulatory Commission (FERC) on November 17, 2022, has gotten hold of a new export authorization from Chris Wright, U.S. Secretary of Energy. This is said to be the first major U.S. LNG project to receive an export authorization for non-free trade agreement (non-FTA) countries since the Biden-Harris administration’s freeze on LNG export permit approvals.

Secretary Wright underlined: “President Trump has outlined a bold agenda for unleashing American energy dominance, and restoring regular order on U.S. LNG export permits is critical for meeting this commitment to the American people. Today marks one of many steps that DOE will be taking to assure our future as a reliable energy supplier to the world and resume regular order to our regulatory responsibilities over natural gas exports.

“Exporting American LNG strengthens the U.S. economy and supports American jobs while bolstering energy security around the world, and I am proud to be working with President Trump to get American energy exports back on track.”

The go-ahead conditionally grants Commonwealth LNG authorization to export LNG to non-FTA countries from the proposed Commonwealth LNG project, after the DOE found that LNG exports from the project would likely yield economic benefits to the United States, diversify global LNG supplies, and improve energy security for U.S. allies and trading partners over the export term through 2050.

As a result, DOE expects to issue a final order to Commonwealth LNG later this year. The LNG terminal will use a highly modularized approach to enable the construction of the facility with greater schedule and cost assurance, allowing LNG production to begin by the end of 2028.

Once constructed, Commonwealth LNG will be able to export over 1.2 billion cubic feet per day (bcf/d) of natural gas as LNG, further cementing the United States’ position as the top global LNG exporter. The project is perceived to be in the advanced stages of development and Kimmeridge upped its stake in the terminal in June 2024 when it was disclosed that the final investment decision (FID) was expected in the first half of 2025.

With five 50,000 cubic meters storage tanks, the Commonwealth LNG facility is envisioned to accommodate vessels up to 216,000 cubic meters. Gas supply will be enabled by a 3-mile pipeline interconnected to two major pipeline systems with significant excess transportation capacity.

Glencore recently penned a heads of terms (HoT) for 2 million tonnes per annum of LNG for 20 years from the future export terminal and equivalent natural gas supply from KTG under a netback agreement.

Based on the data available in the most recent ‘Short-Term Energy Outlook’ from the U.S. Energy Information Administration (EIA), the current U.S. LNG exports are expected to reach record highs in 2025, averaging over 15 bcf/d, accompanied by record highs in the current U.S. natural gas production of almost 105 bcf/d.